In 1992 Michael Hartnett was appointed CEO of RBC Bearings Incorporated (NASDAQ:ROLL). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Michael Hartnett’s Compensation Compare With Similar Sized Companies?
According to our data, RBC Bearings Incorporated has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$12m over the year to March 2019. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$775k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
Thus we can conclude that Michael Hartnett receives more in total compensation than the median of a group of companies in the same market, and of similar size to RBC Bearings Incorporated. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. It could be important to check this free visual depiction of what analysts expect for the future.
The graphic below shows how CEO compensation at RBC Bearings has changed from year to year.
Is RBC Bearings Incorporated Growing?
Over the last three years RBC Bearings Incorporated has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is up 3.3% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
Has RBC Bearings Incorporated Been A Good Investment?
Most shareholders would probably be pleased with RBC Bearings Incorporated for providing a total return of 92% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by RBC Bearings Incorporated, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling RBC Bearings (free visualization of insider trades).
If you want to buy a stock that is better than RBC Bearings, this free list of high return, low debt companies is a great place to look.
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